Korea Exchange Considers Longer Hours While Mulling Acquisitions

January 12, 2014 Leave a comment

Korea Exchange Considers Longer Hours While Mulling Acquisitions

South Korea’s bourse operator may extend trading hours for Asia’s fourth-biggest equity market and will consider overseas acquisitions after local trading volumes slumped to a six-year low.Korea Exchange plans to extend trading hours after the official close and may lengthen its six-hour regular trading day within five years to boost liquidity in the $1.2 trillion market, according to its first development plan since Choi Kyung Soo took over as chairman in October. The bourse will consider acquiring foreign alternative trading systems and exchanges over the next three years, it said in an e-mailed statement today.

The exchange is counting on growing demand from overseas money managers to revive trading volumes after the turnover of Kospi (KOSPI) index shares dropped to the lowest levels since 2007 amid a fifth year of outflows from South Korea’s individual investors. Foreigners bought a net $12.9 billion of South Korean shares in the second half of 2013 as the Kospi climbed 7.9 percent. The gauge has dropped 2.6 percent so far this year.

“The new plan is in place to lure more foreign investors into the local market and boost the overall trading volume,” Choi said at a press conference in Seoul today.

The 100-day average value of shares changing hands on the benchmark Kospi index fell to the lowest level since June 2007 at the end of December, according to data compiled by Bloomberg. Individual investors, which account for about half of equity trading, sold a net $5.3 billion of shares last year.

The bourse plans to extend after-hours trading as early as the first half of 2014 and may lengthen regular trading hours after holding discussions with industry officials, Choi said.

Korea Exchange is also planning to introduce futures contracts on the Kospi 200 Volatility Index, a gauge of expected price swings in the nation’s stock market.

To contact the reporters on this story: Sharon Cho in Seoul at ccho28@bloomberg.net; Kyungji Cho in Seoul at kcho54@bloomberg.net

Filed under Macro Trends

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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